Elliott Management Corp’s private equity arm has submitted a bid to acquire U.S. networking software maker Gigamon Inc (GIMO.N), according to people familiar with the matter.
The bid from the private equity arm, called Evergreen Coast Capital Partners, comes five months after Elliott’s activist investor wing purchased a 15.3 percent stake in Gigamon and pushed it to explore a sale.
Reuters could not confirm Elliott’s offer price for Gigamon, which had a market capitalization of about $1.58 billion based on its closing price on Friday. Evergreen has secured financing from two investment banks and made a formal bid in recent days, the sources added, asking not to be named because the matter is private. Gigamon’s shares jumped 5 percent on Monday immediately following the news, before paring gains to trade up 3.8 percent at $43.95.
Elliott and Gigamon declined to comment.
Elliott’s role at Gigamon as both shareholder activist and potential buyer highlights the hedge fund’s affinity for tech targets and its reputation as one of the world’s most aggressive shareholders.
Should Evergreen succeed in acquiring Gigamon, it would mark the first time Elliott’s private equity group led the acquisition of a company that its activist side had put into play.
While activist investors have made offers for companies in the past, New York-based Elliott, with assets of more than $33 billion, is one of the few hedge funds with a dedicated team chasing buyouts of whole companies. Elliott launched Evergreen in 2015.
Gigamon has been working with an investment bank to evaluate takeover interest in recent months. The company could end its exploration of alternatives if the acquisition offers it receives do not meet its valuation expectations, the sources said.
Gigamon, based in Santa Clara, California, attracted the interest of some companies and other private equity firms, but they appear to have fallen away from the sales process, the sources said. Gigamon’s stock has risen more than 22 percent since Elliott first disclosed its stake.
Gigamon makes software used in large data centers to boost the flow of traffic and prevent bottlenecks.
Gigamon is not the first time that Elliott’s activist team has converged with its private equity group.
Evergreen participated in the auction for security software firm LifeLock Inc, where Elliott had taken an activist stake and pushed the company into a sale. LifeLock ultimately sold to Symantec Corp (SYMC.O) for $2.3 billion.